ARBITRATION

Arbitration is QUASI JUDICIAL METHOD of settling disputes of a CIVIL NATURE . The decision ( award )of the is in the nature of judgment . E.g. The Indian village Panchayats and Panchas offer the services of arbitration . Definition of arbitration : Under the Indian Arbitration Act (IAA) of 1940 it has been defined as Settlement of disputes and differences related to Civil Matters ( e.g. Money or Property or Breach of contract ) between one party and another in a Quasi Judicial manner, by the decision of one or more persons called Arbitrators appointed by the contended parties, without having recourse to a court of law .

ARBITRATION AGREEMENT OR SUBMISSION TO ARBITRATION : SEC 2(a) of IAA ,1940 A written agreement to submit present or future differences to arbitration, whether an arbitrator is named there in or not . ESSENTIALS OF A VALID ARBITRATION AGREEMENT : 1) There must be an written agreement . 2) The agreement must indicate an intension of the parties have the disputes and differences referred and decided by arbitrator . 3) The agreement must be in respect of present or future disputes . 4) It is not necessary that an arbitrator should be named in the arbitration agreement .

REVOCATION OF ARBITRATION : A dispute once submited to arbitration cannot be withdrawn and the arbitration agreement cannot be revoked except under the following circumstances : a) When both the parties to the dispute agree between themselves to withdraw the disputes , or b) When the party who wants to revoke the submission of a dispute to arbitration takes the permission of the court to such course .

WHO CAN REFFER DISPUTES OF ARBITRATION : 1) Reference by a minor or lunatic . 2) Reference by the karta . 3) Reference by an agent . 4) Reference by a trustee . 5)Reference by an official assignee . 6) Reference by a partner . 7) Reference by executor or administration . 8) Reference by an insolvent . 9) Reference by an attorney or counsel .

WHAT MAY BE REFFERED TO ARBITRATION : a) Any matters affecting the private rights of the parties, which can be subject matter of a Civil suit may be referred to arbitration .E.g. right too hold the office of a pujari in a temple . b) All matters of a Civil nature i.e. disputes about property or money disputes arising out of Breach of contract or Question law . c) Matters relating to personal rights between the parties . d) Disputes regarding compliment and dignity . e) A time_barred claim . f) The question whether judgement has been properly obtained or it is erroneous or void . g) Disputes between an insolvent and his creditors can be referred to arbitration by the official Assignee or Receiver, through the insolvency proceedings cannot so referred . h) Cases which involve both questions of fact and of law .

WHAT CANNOT BE REFERRED TO ARBITRATION : a) Matters of criminal nature are the concern of the community and must be decided by a court of law . b) Disputes relating to matrimonial relations like a suit for divorce or restitution of conjugal rights . c) Lunacy proceedings in the nature of inquisition are a subject matter only for a court of law . d) Testamentary matters relating to the validity of a will or the issue of a probate of will can be decided only by the probate court and not by an arbitrator . e) Question relating to trusts for public purposes of charitable or religious nature . f) Insolvency matters, i.e. adjudging a person as an insolvent . g) Matters relating to the guardianship of a minor or lunatic. h) Any execution proceedings .

MODES OF ARBITRATION : There are three different

modes of submitting a dispute to arbitration : A) Arbitration without the intervention of the court . B) Arbitration with the intervention of the court when there is no suit pending . C) Arbitration with the intervention of the court where a suit is pending .

A) ARBITRATION WITHOUT THE INTERVENTION OF THE COURT : a) The appointment of arbitrators who may be appointed as an arbitrator . b) Appointment of an arbitrator by the parties . The parties may appoint an arbitrator in the following ways : 1) An arbitrator may be named in the arbitration agreement, or

2) He may not be named at all . 3) It may be agreed that the arbitrator shall be appointed by a third party who shall be named in the agreement . c) Appointment of arbitrator by third party . d) Power of a party to appoint a new or sole arbitrator . e) Appointment of an arbitrator by court : under sec (8), the court has the power to appoint an arbitrator or umpire in the following cases : * Where the arbitrator or arbitrators have to appointed by the consent of the parties, but the parties do not after differences have arisen concur in the appointment . * If the appointed arbitrator or umpire neglects or refuses to act or is incapable of acting or dies and the arbitration agreement does not show that the vacancy should not be supplied and the parties do not fill up the vacancy .

* Where the parties or arbitrators are required to appoint an umpire and do not appoint him . f) Appointment of three are more arbitrators . g) Remuneration of arbitrators or umpire . h) Removal of an arbitrator or umpire of the court . i) Effect of death of a part .

POWERS OF AN ARBITRATOR : The power of an arbitrator shall be regulated by the terms and conditions of the agreements to refer disputes to arbitration. Therefore, subject to the provisions of the agreement arbitrators will have the power to do any one of the following things : 1) To administer oath to the parties and witness appearing . 2) To refer matters of law or the award for the opinion of the court . 3) To make the award conditional or alternative .

4) To correct any clerical mistake or error arising from any accidental slip or omission in the award . 5) To put necessary interrogatories to any party to the dispute . 6) To determine by and to whom the costs of reference and the award shall be paid . 7) To award interest . 8) To make an interim award unless the agreement prohibits it . 9) To grant installments and fix the number, amount, mode and time of their payment . 10) To order for the specific performance of the contract . 11) To order for the dissolution of partnership . 12) To determine questions of legal representative of the deceased party to arbitration agreement .

DUTIES OF ARBITRATOR : An arbitrator is required to perform the following duties : a) To act judicially . b) To observe the first principals of the justice . c) To act impartially . d) To decide all matters referred . e) To discharge functions personally . f) Not to exceed his authority . g) To disclose his personal interest . h) Should not make use of personal knowledge unless authorized to do so . i) Not to misconduct . j) To rehear the evidence . k) To sign the award .

B) ARBITRATION WITH INTERVENSION OF COURT WHERE NO SUIT IS PENDING : Sec ( 20 ) of the arbitration act lays down the following procedure for having the reference made through court . 1) Where there is an arbitration agreement and no suit of pending, and where a difference has arisen to which the agreement applies . 2) On such application being made, the court shall issue notice there of to all the parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filled . 3) Where no sufficient cause is shown, the court should order the agreement to be filled and shall make an order of reference to the arbitrator appointed by the parties. 4) Thereafter, the arbitration shall proceed in the same manner as an arbitration with out the intervention of the court .

C) ARBITRATION WITH INTERVENTION OF THE COURT WHERE A SUIT IS PENDING : Arbitration of any suit which is pending in a civil court . The parties to a suit may be mutual consent apply in writing at any time before judgment to the court for an order of reference, where upon the court shall appoint an arbitrator in such manner as may be agreed upon between the parties .